Illinois Tool Works Inc.

NYSE:ITW Stock Report

Market Cap: US$79.9b

Illinois Tool Works Valuation

Is ITW undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of ITW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ITW ($270.62) is trading below our estimate of fair value ($282.9)

Significantly Below Fair Value: ITW is trading below fair value, but not by a significant amount.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ITW?

Key metric: As ITW is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for ITW. This is calculated by dividing ITW's market cap by their current earnings.
What is ITW's PE Ratio?
PE Ratio23.1x
EarningsUS$3.46b
Market CapUS$79.91b

Price to Earnings Ratio vs Peers

How does ITW's PE Ratio compare to its peers?

The above table shows the PE ratio for ITW vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average30.7x
PH Parker-Hannifin
31.1x8.4%US$90.0b
OTIS Otis Worldwide
24.3x5.4%US$39.6b
IR Ingersoll Rand
49.2x17.1%US$41.3b
DOV Dover
18x-11.4%US$27.6b
ITW Illinois Tool Works
23.1x1.3%US$79.9b

Price-To-Earnings vs Peers: ITW is good value based on its Price-To-Earnings Ratio (23.1x) compared to the peer average (30.7x).

Price to Earnings Ratio vs Industry

How does ITW's PE Ratio compare vs other companies in the US Machinery Industry?

4 CompaniesPrice / EarningsEstimated GrowthMarket Cap
AIRJ AirJoule Technologies
1.8xn/aUS$411.62m
CVGI Commercial Vehicle Group
2.9x-46.6%US$80.23m
FATH Fathom Digital Manufacturing
2.6xn/aUS$35.24m
ZEVY Lightning eMotors
n/an/aUS$6.00
No more companies available in this PE range
ITW 23.1xIndustry Avg. 24.1xNo. of Companies9PE01224364860+
4 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: ITW is good value based on its Price-To-Earnings Ratio (23.1x) compared to the US Machinery industry average (24.1x).

Price to Earnings Ratio vs Fair Ratio

What is ITW's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ITW PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio23.1x
Fair PE Ratio22.5x

Price-To-Earnings vs Fair Ratio: ITW is expensive based on its Price-To-Earnings Ratio (23.1x) compared to the estimated Fair Price-To-Earnings Ratio (22.5x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst ITW forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$270.62
US$257.32
-4.9%
10.0%US$312.00US$215.00n/a19
Nov ’25US$263.08
US$255.84
-2.8%
10.0%US$312.00US$215.00n/a19
Oct ’25US$261.35
US$246.40
-5.7%
9.6%US$286.00US$203.00n/a18
Sep ’25US$253.18
US$247.26
-2.3%
8.4%US$286.00US$211.00n/a18
Aug ’25US$242.26
US$248.14
+2.4%
8.8%US$294.00US$211.00n/a18
Jul ’25US$233.41
US$253.20
+8.5%
9.2%US$305.00US$212.00n/a18
Jun ’25US$242.75
US$254.14
+4.7%
9.0%US$305.00US$212.00n/a18
May ’25US$242.27
US$252.24
+4.1%
9.0%US$305.00US$212.00n/a19
Apr ’25US$265.23
US$249.66
-5.9%
9.6%US$303.00US$200.00n/a19
Mar ’25US$260.19
US$245.71
-5.6%
9.0%US$285.00US$200.00n/a17
Feb ’25US$255.55
US$244.65
-4.3%
9.7%US$285.00US$192.00n/a17
Jan ’25US$261.94
US$236.35
-9.8%
9.5%US$277.00US$185.00n/a17
Dec ’24US$245.24
US$232.00
-5.4%
8.1%US$260.00US$185.00n/a18
Nov ’24US$224.54
US$232.97
+3.8%
8.3%US$260.00US$185.00US$263.0818
Oct ’24US$230.31
US$241.90
+5.0%
9.3%US$265.00US$183.00US$261.3519
Sep ’24US$247.37
US$245.40
-0.8%
9.2%US$292.00US$188.00US$253.1820
Aug ’24US$251.85
US$242.35
-3.8%
9.5%US$292.00US$183.00US$242.2620
Jul ’24US$250.16
US$238.75
-4.6%
9.7%US$281.00US$183.00US$233.4120
Jun ’24US$221.98
US$237.45
+7.0%
10.0%US$281.00US$186.00US$242.7520
May ’24US$245.81
US$237.89
-3.2%
10.3%US$282.00US$183.00US$242.2719
Apr ’24US$243.45
US$238.63
-2.0%
11.2%US$282.00US$183.00US$265.2319
Mar ’24US$232.31
US$238.63
+2.7%
11.2%US$282.00US$183.00US$260.1919
Feb ’24US$239.55
US$215.95
-9.9%
11.4%US$259.00US$170.00US$255.5519
Jan ’24US$220.30
US$209.74
-4.8%
11.3%US$243.00US$171.00US$261.9419
Dec ’23US$227.43
US$201.78
-11.3%
10.8%US$243.00US$171.00US$245.2418
Nov ’23US$213.29
US$200.89
-5.8%
10.2%US$243.00US$171.00US$224.5418

Analyst Forecast: Target price is lower than the current share price.

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